'76 Blog

(CCU Faculty) We often hear from President Obama that “the rich should give back.”  But what have they taken?  Nothing!What have they given?  ** Jobs: if you have a job, thank an entrepreneur.  ** Goods and services: things we all need to survive are provided by these entrepreneurs.  ** More than their fair share of taxes: the richest 20% of Americans pay over 86% of the taxes, while the poorest half of Americans pay no income taxes at all.(Heritage Foundation) ** Charitable Giving: the richgive the lion’s share to charity, while Liberals have a poor record of giving to charity, believing it is the government’s job.(NicholasKristof, N.Y. Times) Take Steven Jobs, for example. What has he taken from the rest of us?  Nothing.  What has he given? Tens of thousands of jobs, an expanded tax-base, the latest high-tech innovations making all of us more efficient and driving down prices. Yet President Obama said recently that Steven Jobs has not adequately“given back”.What has Steven Jobs taken that he should “give back”?  The jobs Steven Jobs provided are not the unproductive ones Obama claims he will provide in his many speeches.  In fact,these “jobs” have not even been produced, as unemployment continues to rise. Who are those who have taken?  ** Government takes from the paychecks of the productive to fund theirunproductive schemes. ** Politicians take from tax payers to fund their pork projects, which buy them votes for reelection. ** The indolent take “entitlements” from the government. What “entitles” them to take from the rest of us who produce?  “Entitlement” means getting what you deserve. What did they do to deserve the money others earned?  Call it government enforced charity, not “entitlement”. On Thursday night President Obama will tell us his plans to provide more jobs.  Can he really create jobs?  When the government hires someone, where does the money to pay these new government employees come from?  From taxing the rest of us, from government borrowing more and driving us deeper in debt, or from printing up more paper money causing inflation down the road.  Each job saved or created by the Obama administration has cost us $533,000. (Dan Farber, CBS News)  Jobs created by the private sector cost us nothing.  In fact, for each unproductive job the government creates, two productive jobs in the private sector are destroyed. (Rick Santorum) The best jobs program would be for the government to get out of the way of those who really produce jobs, by no longer punishing the productive to reward the unproductive, by lessening the regulatory burden on the productive, by providing the economic stability so that the real job-creators can anticipate future costs, plan the expansion of their companies, and hire more people. If a government continually tries to soak the rich, they lose the very people who made their country productive. Millions in recent centuries came to America for opportunity.  If our government now limits this opportunity, people will leave in droves.  Millions fled the Socialist experiments of the 20th century to seek freedom and opportunity in the West.  Why abandon what has proven successful, only to copy the failed policies of failed regimes which we thought were on the ash heap of history?

(Centennial Fellow) Here's what I want readers to do. Put your hands together with fingers interlaced and pointing downwards next to your palms and bring the heels of the palms together. Then stick your two index fingers and thumbs up until the next to last paragraph while I talk to you about corporations, Republican Mitt Romney and a widespread misconception. It's that corporations are reptiles. Recently, when presidential candidate Romney was confronted by Democratic demonstrators, he said taxing corporations is taxing people, that corporations are people. Though he happens to have made millions as a corporate whiz, many responded with derision, including a TV reporter who committed a gaffe by calling it a gaffe. Please. Someone or something has to own those corporations, run them and work in them. The only creatures we know of with enough brainpower are people, unless there is such a thing as corporate-caused Darwinian devolution, leaving these souls with rough, green skin, long tails, sharp teeth and barely more alertness than TV reporters. I don't think so. I do think I can identify two sources of the confusion. One is the legal fiction that a corporation is a person with an accountability of its own. While this device accomplishes vital purposes -- for instance, by making purchases of corporate shares more likely through non-liability for debts -- it's a fraction of the reality, like defining a marriage as only legal advantages instead of the uniting of two people. The bigger picture is that when corporations go broke and close down, lots of everyday Americans (aka, people) find themselves unemployed. Shareholders (aka, people) also lose. When the firms do well in a non-scary economy, they will often expand and hire more workers (aka, people) while stock values go up, giving succor among others to retired baby boomers (aka, people) relying on invested savings. People are absolutely affected by corporation taxes (including those known as consumers). It's also the case that people continue to be full-fledged citizens in an association. Many corporations are small, non-profit and sometimes organized as a means of people having their rightful say in public affairs. Even people in corporations out to make a buck -- thank God for them -- are similarly entitled to free speech and other liberties sometimes undermined by judges and politicians. That thought brings us to the next reason for saying corporations are not people -- the political objective of dehumanizing them, of making it seem that while government is by, of and for the people, corporations are sly, alien and against the people, commonly led by CEOs with marginal homo sapiens ratings. Let's concede some CEOs behave atrociously while adding that you can also find villains among legislators, TV reporters, columnists, you name it. I'll agree, too, that campaign donations can cause corrupt politicians to bow deeply. But you really don't understand American politics if you don't get it that pleasing voters is a more significant determinant of action, that the government delivers considerable pain to corporations and that the main reason for cronyism is intrusiveness. Control too much as an institution vastly more powerful than all corporations put together, and those who are controlled try to influence you back. Corporations are primarily friends, providing us with such desirables as food, clothing, shelter, the highest productivity of any nation in the world and wages (aka, money). Government coercively takes much of that money to spend wastefully. Fiscal recklessness now has us in one of the most threatening predicaments of recent times. Now, let's come back to those two hands of yours, saying first off that some may think of churches as just buildings. Not so. Recall the childhood rhyme, saying, "Here's the church, here's the steeple," and then turn your hands upside down with the fingers sticking in the air and conclude, "open the doors and see all the people." People -- good people, people you know, maybe you yourself, definitely the errant TV reporter -- also constitute corporations.     

('76 Contributor) Authors Gretchen Morgenson and Joshua Rosner have done the country great service with their book, Reckless Endangerment, recently noted at # 1 on the New York Times hardcover business reading list. If you anguish and puzzle as I do about our country’s future, here’s what you need to know about the mortgage meltdown and the unpunished scoundrels behind it. In 1992 unremarkable bureaucrats led by Alicia Munnell, authored a lending report under the aegis of the Boston Federal Reserve.  It was humdrum reading, except a predisposed reader could have concluded that lending discrimination was rampant in the home mortgage sector. And many did. The grievance industry oxygenated the convenient conclusion into a new affordable lending battle cry and Munnell’s document became the fuse that ignited the home mortgage meltdown.  Never mind that more objective thinkers would conclude that banks don’t lavish loans on applicants with erratic and low incomes, negligible cash reserves and poor credit histories. Voices of reason were quickly drowned out as the press and fairness denizens insisted that social justice be done.  Thus was born a new constitutional right: home ownership for all. And the opportunists were legion, just waiting in the wings. Enter Jim Johnson with Fannie Mae and her brother, Freddie Mac. Some of the misdeeds unearthed by the authors about the high flyers in these “public-private partnerships” and their chum-in-the-water enablers would have landed most of us in jail.  The lineup is entertaining not just for the sheer brazenness of their underhandedness, but also for the high profiles these same actors still have today.  Should you have opinions about Barney Frank, Angelo Mozillo, Allen Greenspan, Timothy Geithner, Robert Rubin, Jim Johnson, Franklin Raines, Peter Orszag and others, shelve them until you finish the book.  “A Team” players all in the credit meltdown, you’ll be shocked to learn the most crooked among them never served a day in jail. The Peter Principle of screw-up and move up seems to work exceptionally well in positions of public trust. Let’s not overlook Wall Street. For those of you who believe in fat cats, the evidence behind your gut instinct is here too.  What fair and not so fair-minded people mucked up and was steamrolled over government regulators and greased by well-moneyed lobbyists, was finally metastasized by the Gordon Geckos of New York City.  On this subject Morgenson and Rosner deliver great clarity. They detail how investment banking wonders piled trashy loans into gift boxes, called CDO’s (collateralized debt obligations), and laughed their way to million dollar bonuses while leaving taxpayers on the hook. Should you genuinely wonder how we have reached our current national economic malaise, you owe it to yourself to read this thoroughly researched and documented autopsy.  History may yet judge this calamity the American Waterloo.  

('76 Contributor) The burden of sales and use tax compliance, reporting and audits for small business is one of many reasons that a rational person should think twice, thrice and beyond before launching a new enterprise.   My 10-person technical service shop in metro Denver recently received a long-awaited sales and use tax audit report. Tax due was less than a hundred dollars. No business can run completely error free. Confirmation that we were 99.999875% compliant over the five-year period was cause of celebration. My controller received praise and a raise. Taxpayers beware of the real cost of a sales tax audit. Here is the estimated tab from ours: · State auditor on site 8 business days ($3,500 borne by the state) · Estimated report compilation time ($2,500 borne by the state) · Accounting hours preparation ($2,250 cost to the company) · Answering questions, research during audit  ($1,600 cost to the company) · Owner time to clean rest room after every “visit” by the auditor  ($150 cost to company) (The hygiene habits of our government guest will not be disclosed in this family friendly forum.) Ten thousand dollars - when you add it all up, that was the estimated total cost to our Colorado economy!   It's true that not all companies comply with sales/use tax complexities as well as we have. The threat of an audit encourages businesses to follow the rules. But only a state would deem it cost-effective to fully prosecute an eight-day audit of a company that on the first day could be identified as highly compliant. The return on investment of this audit was a minus 98% from the perspective of the state. Is it any wonder why employment growth is anemic and the state budgets are in the red?  

It is increasingly rare to find a report in the media that shows America’s largest employer, Wal-Mart, or any large corporation for that matter, in a positive or even neutral light.  A loud minority have waged a cultural and public war against Wal-Mart, referring to and viewing it as an evil corporation, a burden on the economy, and even an oppressor of the lower class. But these viewpoints are erroneous and have been disproved by multiple studies showing that Wal-Mart’s existence is favorable to our country as a whole, while also providing benefits to millions of individuals, especially to those within the lower class.  Despite what is shown in the mainstream media, Wal-Mart has gained the approval of the majority of Americans by being a consistently affordable supplier, employing well over one million Americans -- thereby increasing their purchasing power and (through its prosperity) improving the United States and its economy as a whole. Peering through the lens offered by the left, one would observe the selective exposés paired with ‘evil’ smiley stickers, and easily fall under the assumption that all level-headed Americans must despise Wal-Mart.  However, the not so convenient truth that liberals ignore is that the majority of Americans approve of this supposedly cancerous corporation.  A Rasmussen poll in 2006 found that 69% of the adult American public have favorable views of Wal-Mart; this indicates that the vast majority of Americans enjoy the benefits of the low prices and convenience that Wal-Mart provides.  A widely accepted criticism of Wal-Mart is the alleged mistreatment of the corporation’s employees, yet when the Rasmussen survey sample is narrowed to include only employees and family members of Wal-Mart employees, the favorable ratings increase to nearly 80%. Wal-Mart’s employees are satisfied with their jobs at a rate far above the national average- 47% of working Americans have favorable views of their employers as reported by Jenna Bryner of LiveScience.com.  Clearly Wal-Mart is well loved, despite poor PR, because of its continued offering of excellent shopping and employment experiences. The oft publicized notion that Wal-Mart is damaging low income workers, families and communities across America is equally ludicrous.  Wal-Mart is the world’s single largest private employer, giving jobs to nearly two million people.  This alone challenges any notion that Wal-Mart might harm mid to low income people, as they provide these people with the wages used to feed their families and pursue their dreams.  Speaking of mouths to feed: It is estimated that the lowest quintile of American households spend 26% of their income on groceries.  Wal-Mart’s food division posts an average of a 25% discount compared to other large supermarket chains; this percentage saved “is equivalent to a 6.5% boost in household income” through savings, says Slate. The aforementioned Rasmussen report also reveals that “lower and middle income Americans are more likely to have a favorable view of Wal-Mart than upper income Americans”, which suggests again that Wal-Mart does indeed benefit the lower and middle class. Too often in today’s culture, ‘wealth envy’ hardens society’s views of the successful. However, even giving consideration to of this growing sociological trend it seems odd that a company as universally beneficial as Wal-Mart might be hated.  Because Wal-Mart has been able to succeed, they are now in the position to give generously to various charities and community development programs.  Wal-Mart has given over two hundred and seventy million dollars within the US, making it the “country’s largest donor of cash,” says an AP dispatch. Wal-Mart can also be credited with much of the economic dominance that all of America has enjoyed over the past fifteen years, as Wal-Mart and corporations of its breed account for a large portion of our international financial activity.  Harvard economics professor Kenneth Rogoff claims that “together with a few sister ‘big box’ stores (Target, Best Buy, and Home Depot), Wal-Mart accounts for roughly fifty percent of America’s much vaunted productivity growth edge over Europe during the last decade.”  It is difficult to imagine the privileges and luxuries we as American’s would be forced to relinquish if Wal-Mart and its parallels were to be disbanded. Thanks to innovation and resourceful development, Wal-Mart has been able to grow into a thriving corporation that serves as a haven for many Americans who rely on the company for its affordability, valued employment, and its advantageous affects on America as a whole especially the lower and middle classes.  With growing volatility in the economy we should be thankful for corporations like Wal-Mart, which afford us so much for so little.  Their originality has granted America several luxuries we have grown accustomed to, while demanding no sacrifice in return.  If Wal-Mart were to part from its current ways of operation, the nationwide effects on Americans would be difficult to stomach.  For the lower twenty percent the fall of Wal-Mart would effectively mean a 6.5% pay cut, while the adverse effects would ripple throughout the rest of America in varying ways.  It is easy to demonize a company with such incredible wealth and accomplishment; however, it is important to not be consumed by resentment or envy towards the triumph of others.  We must, instead, view the accomplishments of our fellow Americans in a positive way, using their success as inspiration for our own pursuits.  

('76 Contributor) It seems to me that in spite of the near-paralysis of government at all levels on meaningful reforms for health care, our runaway costs need someone’s attention. Fewer and fewer small businesses can now afford anything but an insurance package that has a huge deductible. So as a totally inexperienced drafter of such proposals, but with my share of business experience in the real world, I am so bold as to offer the following simple start:  1) Tort Reform (obviously a difficult area to get passed due to connection of Dems with Trial Lawyers)    a) Lost case the loser pays the opposition attorney's fees    b) the settlement for "pain and suffering" be capped at $250,000 (I believe that is the present cap in Colorado)     c) maximum for plaintiff attorney to participate in award for "pain and suffering" make it 5%. (be willing to settle for 10%)     d) 3 successful suits where malpractice has been adjudicated makes the Doctor uninsurable from any state authorized insurance company.    e) More than 5 unsuccessful suits within one year (from initial filing) bars the lawyer personally from any participation in this type of litigation for 3 years anywhere USA (purpose is to put that lawyer permanently to pasture).      f) Excess reserves accumulated by a “malpractice” insurance company (est. 2X annual Claims) shall be rebated to Doctors as a refund.     g) Standardize accounting for insurance companies so Administrative costs can be tracked and limited to 30% (Make total revenues less 30% to equal the definition of reserves for claims. If the balance accumulates to 2 X annual payout rebate back to Doctor) 2) Unrestricted marketing across state boundaries.      3) Mandatory posting of prices by the doctors for ALL specific procedures - to enable consumer to shop prices and judge if premium is worth going to a "high" reputation Doctor. That does not imply that any price controls would be enacted. 4) One ought to be able to buy a “Cadillac Medical Insurance policy for an “appropriate” price without government penalty to cover the higher priced procedures. Let the market work it out.      5) Standardize “Basic” mandatory electronic medical records - Doctors and health institutions may maintain more detailed records, but those need to be electronic by 2012 and compatible so that if requested by a third party (proper permission) they can be delivered electronically without delay.     6) Medical savings accounts for all and ability to purchase health insurance with PRETAX dollars.  This is probably just a start, but keep the "bill" to less than 10 pages and if it requires more, prioritize the items and only pass some with the understanding that there will be another opportunity. Focus should be on cost reduction without destroying the healthcare system.   

After all the Hickenhoopla dies down, Colorado voters may experience a sick feeling of déjà vu as the Denver mayor and Democrat candidate for governor claims that he's "business friendly." We've been down this campaign trail before, just four years ago, when nice guy Bill Ritter bent over backward to ingratiate himself to every gulliblebusiness organization in the state.  Only the most ardent Republicans refused to fall for the fallacy of a business-friendly Democrat, and business leaders and editorial boards across the state have been (deservedly) kicking themselves ever since. So, here we go again. Like Ritter, Denver mayor John Hickenlooper comes across as likable.  His knack for self-deprecating humor is particularly endearing. Like Ritter, Hickenlooper seems like the kind of guy whom you would welcome as your next-door neighbor.  Neighborliness might indicate he has the skills to shovel snow off your sidewalk -- as Hickenscooper has already demonstrated -- but doesn't equate to "this guy will make a great governor." Like Ritter, Hickenlooper aims to avoid any serious challenge from within his own party, and that doesn't happen unless labor union bosses are convinced they have a candidate who will do their bidding. The Denver Post reported that one of Hickenlooper's early testing-the-waters phone calls was to Wally Stealey, retired lobbyist and labor union stalwart, who complained that "labor had been terribly abused by Ritter." This is the same Ritter whom The Post -- which in 2006 lauded him as "the best choice for Colorado" -- labeled "a toady to labor bosses" and "a bagman for unions and special interests" just one year later. While Hickenlabor strives mightily to assure union bosses that he will be even better for them (which means worse for Colorado's economy) than was Ritter, will so-called "business leaders" again be duped? Will they dismiss the costly lessons learned during the past three years? Will they believe that a candidate who can enthrall hard-core union leaders and hard-left environmentalists will, once elected, throw them under the bus to please the business community? When Hickenlooper ran for mayor, he ran in a nonpartisan election decided by personal popularity and he benefited from being "anybody but Don Mares." But as Ritter has learned, when Democrats control the legislature, a Democrat governor who vetoes Democrat legislation -- particularly legislation backed by organized labor -- evokes the ire of his party's liberal base. Remember that four years ago, The Denver Post reported that candidate Bill Ritter "indicated he would be at least as business friendly as Republican Gov. Bill Owens."  To prove this, Ritter reviewed the 47 bills that Owens had vetoed in 2005 when sent to him by a decidedly business-hostile Democrat legislature.  Ritter claimed that he would have vetoed 38 of those bills. Despite that tough talk, Gov. Ritter has vetoed eight, seven and four bills, respectively, in his first three years.  Out of more than 1,400 billspassed, that's a rubber-stamp rate of 98.7%.  And still Big Labor feels "abused." Did the Democrat-controlled legislature suddenly turn over a business-friendly leaf and cease to do the bidding of labor unions, trial lawyers and anti-capitalists?  Hardly. Quick-witted Republican state chairman Dick Wadhams dubbed the new Democrat governor-in-waiting "Hickenritter" and argued, "There is not a dime's worth of difference between (Ritter and Hickenlooper)." Colorado voters deserve, Wadhams says, to know which Ritter policies Hickenlooper will overturn: * Ritter's property tax increase?* Ritter's vehicle fee increase?* Ritter's early release of violent criminals?* Ritter's executive order to unionize state workers?* Ritter's repeal of state spending limits?* Ritter's job killing energy policy? Hopefully, Colorado voters will insist on firm answers to these tough questions after enduring three -- going on four -- years of a Democrat monopoly at the State Capitol. After all, voters bought the myth of a business-friendly Democrat and it's cost more than $1 billion higher taxes and fees ‹ all without a public vote. The old adage says, "Fool me once, shame on you. Fool me twice, shame on me." Colorado can't afford to be fooled twice. Centennial Fellow Mark Hillman served as state treasurer and senate majority leader. To readmore or comment, go to www.MarkHillman.com .

('76 Editor) You have to read closely to see it, so elegant are the euphemisms, but the company that owns the company that owns the Denver Post is taking bankruptcy to get out from under $1 billion in loans it can't repay. ("Pact lets Post's owner cut debt," Jan. 16.)  I note this with sadness, not any sort of pleasure, because Denver and Colorado need the Post -- all the more so after we lost the Rocky Mountain News a year ago -- and because I admire press lord Dean Singleton, whose MediaNews Group is the nation's second-largest newspaper publisher in terms of circulation and who is one of the world's true visionaries about where journalism is going in the digital age. As today's story explains, MediaNews is in relatively better shape than most other struggling or bankrupt newspaper owners, and given Singleton's proven virtuosity there is reason to think he can pilot the company through current storms into sustainability when industry trends smooth out.  For Colorado's sake and in the interest of informed self-government, let's hope so. Disclosure: I am a Denver Post columnist.